Encinitas will not drop as much from peak as Chula Vista because of the housing stock. Most of Chula Vista east of 805 was built after 2000 and a large percentage of homes were built and sold during the height of the market leading to large amounts of forclosure inventory. This must sell inventory just feeds upon it’s self creating more price adjustments and further downward pressure. As prices drop beyound the 30% percent mark, some people that are able to pay their mortages just decided to let the home go into forclosure because they don’t want to pay on a house the is worth 30%+ less then what they owe. At some point these price drops will make their way up to nicer areas, but won’t have the forclosure fuel to create these kinds of price drops. Encinitas will see further price pressure and will have a delayed effect since there isn’t enough must sell inventory. Like Bugs has said before, everything is interconnected and it’s finally starting to show in sales. It’s like what Rich said about the areas that have declined the most are seeing more sales, while areas that are holding strong are seeing fewer sales. So at some point the nicer areas are going to feel the pain. It’s just hard to guess how much and when.
